Understanding how term to maturity impacts interest rates is crucial for your investment success. This fundamental connection influences everything from your portfolio returns to risk management strategies. As you delve into this guide, you'll
Basics
Why Would You Pay More Than Face Value for A Bond?
As a fixed-income investor, you might encounter situations where you're willing to pay more than the face value (par value) for a bond. This seemingly counterintuitive decision arises when prevailing interest rates decline, making existing bonds with
Can You Lose Money on Bonds if Held to Maturity?
The fixed-income market offers stability through predictable income streams and the return of principal at maturity. However, you need to understand that holding bonds to maturity doesn't guarantee freedom from losses. While most bonds return
Maturity Date: Essential Guide to Understanding Your Investment’s Final Payment Timeline
A maturity date determines when you'll receive your full investment back. Understanding this critical financial timestamp helps you make informed investment decisions and plan your future income effectively. Whether you're investing for the first
Understanding Bond Prices: Above, At, and Below Par
When investing in the bond market, you'll encounter bonds trading "above par," "at par," and "below par." These terms describe the relationship between a bond's market price and face value, providing crucial insights into market conditions and its
Why Does Collateral Lower Your Interest Rate?
Collateral significantly lowers your interest rate by reducing the lender's risk exposure. Understanding how collateral functions is crucial for making informed investment decisions as a fixed-income investor. Collateral acts as a safety net for